Daily Archives: March 15, 2017

Peggy made it all the way to the final interview with the CEO of Acme Inc., and the CEO finished their conversation by saying “You’ve got the job.” That’s great news — but then why did Acme post the same job ad again?

The visit to China by U.S. President Donald Trump’s secretary of state Saturday will help the host formulate what might be described as a five-point plan for handling a volatile, confusing yet somehow stable relationship with the other world superpower.

The massive WikiLeaks Vault 7 release is an extremely important public service. It’s hard to find anyone not concerned by a secret CIA hacking program targeting virtually the whole planet – using malware capable of bypassing encryption protection on any device from iOS to Android, and from Windows to Samsung TVs.

In a series of tweets, Edward Snowden confirmed the CIA program and said code names in the documents are real; that they could only be known by a “cleared insider;” the FBI and CIA knew all about the digital loopholes, but kept them open to spy; and that the leaks provided the “first public evidence” that the US government secretly paid to keep US software unsafe.

If that’s not serious enough, WikiLeaks alleges that “the CIA has lost control of the majority of its hacking arsenal;” several hundred million lines of code — more than what is used to run Facebook.

Someone among the former US government hackers and contractors ended up leaking portions of the CIA archive (Snowden II?). WikiLeaks also stressed how the CIA had created, in effect, its “own NSA” – maximum unaccountability included.

Even though millions already knew – without the technical details – that they were being spied upon by their iPhone or their 4K Samsung, the Vault 7 revelations are far more relevant – and practical – to the average citizen than the 24/7 hysteria fingering President Trump as a Putin puppet. Intel sources are volunteering the – still unexplored – Vault 7 treasure trove is more crucial than what Snowden himself revealed.

And still, vast corporate media sectors embedded with the neocon/neoliberal galaxy are spinning that Vault 7 benefits Trump by changing the subject from alleged Russian hacking interference in the US elections and possible Obama administration-ordered hacks of Team Trump’s communications.

Loony mainstream factions are even advancing that “the Russians” leaked the CIA info to WikiLeaks, thus fueling more suspicion that Russia will interfere in upcoming French and German elections.

May I have an Orwellian iPhone, please?

As we’re mired deep in an Orwellian total screen environment, already conceptualized by Baudrillard in the go-go 1980s, nothing so trivial as the technical proof we’re all being spied upon could alter the (im)balance. The US is already ravaged by a vicious sociopolitical war – and no “threat” to established narratives allows for nuance.

The implication is that, as it stands, there won’t be a US-Russia reset anytime soon – despite hosting invitations from Iceland, Finland or Slovenia; the neocon/neoliberal galaxy nestled in powerful deep state factions will do their best to deny it.

It hardly matters that Trump absolutely does not want war: his entire domestic US economy remix could not possibly allow it. The Pentagon now is essentially an extended special ops unit: it cannot possibly fight a land war (Iran? North Korea? Ukraine?)

Russia, on the other hand, would be ready for war if needs be. The S-500 missile defense system is being deployed: some analysts (not the Ministry of Defense) are sure it’s already protecting the whole Russian landmass. China, by 2021, will have more than 1,000 very mobile warheads, or hidden in those submarines lounging in Hainan. By that time, both Iran and Pakistan will be deep into a strategic defense network with Russia-China, via the Shanghai Cooperation Organization, shielded with their own S-400 and S-500 systems.

Putin is not playing chess. He’s playing Go — and if we look at the board, reality is indeed painful.

Moscow is all but deciding the practical future of Syria, in Astana. Russia virtually wrote the Minsk II agreements, routinely broken by Kiev. Crimea as part of Russia is a fait accompli. Novorossiya for all practical purposes is already a totally autonomous region, with the economy working in rubles. Erdogan owes his imminent regime change in reverse – a presidential sultanate? – to Putin, as Russia warned him about the military coup hours in advance, according to several Russian media sources. Moscow protected Iran’s energy industry during the hardcore OPEC negotiations. Putin all but designed the Russia-China strategic partnership.

Beijing has managed to convince Moscow that One Belt, One Road and the Eurasia Economic Union should be connected, merged and tackled as a win-win Eurasia integration process. If Russia eventually loses economic preeminence across the Central Asian “stans,” it maintains its paramount military/security status.

Russian Foreign Minister Sergei Lavrov never ceases to stress that “our relations with China are at their best level ever in our two countries’ history.”

Add to it a geo-economic gambit; hints of key factions of European business elites getting ready to hitch themselves to China’s growing – slowly but surely – monetary/financial clout, linked to Beijing’s imperative of preventing a collapse of global supply chains. Xi Jinping’s “inclusive globalization,” announced in Davos, sounds more and more like a reality in the making.

In contrast to reality, where China-Russia expand their strategies without exceptionalist illusions, 24/7 neocon/neoliberal hysteria offers a constant barrage of childish, pathetic eruptions. As the self-delusion school of foreign policy refuses to admit Moscow will not sell out China and Iran for a deal with Washington, the last refuge of the scoundrels is cognitive dissonance; fear of Russia incited to cold war 2.0 heights.

So, relax, global citizen; the CIA is benign and benevolent, even when they’re watching you. You have nothing to fear but fear itself – and its name is Russia.

Confirming the expectations of all 41 economists, The Bank of Japan changed absolutely nothing about its monetary policy tonight following The Fed's 3rd rate hike in 11 years. The BOJ said in a statement that it would keep the two key rates at current levels, maintain the pace of its asset purchases, and did not change its economic outlook.

The BOJ maintained its short-term policy rate on some bank reserves at -0.1 percent and…

left its target for 10-year government bond yields at around 0 percent.

It kept the pace of its asset purchases unchanged at about 80 trillion yen ($700 billion) annually.

As Bloomberg reports, with the economy slowly improving and bond yields under control, the BOJ is in position to hold steady for now. But with the Fed rate hike putting upward pressure on yields globally, some economists are looking for signs the BOJ may have to raise its rate targets, particularly if inflation begins to take hold in Japan. “There’s no reason for the BOJ to act now," Hiroshi Ugai, a former BOJ official and chief Japan economist at JPMorgan Chase & Co., said before Thursday’s decision. “The bank will take the U.S. rate hike as good news. What I’m looking for now is any hint of its willingness to raise rates in the future."

For now the reaction is muted and confused (with USDJPY rising – weaker Yen – and stocks up marginally)…

But the policy divergence will make it more challenging for the BOJ to maintain its target for 10-year government bond yields, and some investors are already speculating that it will have little choice but to raise that target as global yields rise and inflation inches up at home. Kuroda’s comments on this and possible tapering of asset purchases will be scrutinized.

Eleven of 41 economists surveyed by Bloomberg said they expected the BOJ to raise its target rate this year, while 25 predicted the BOJ would cut the pace of its debt buying or stop stating its target for annual purchases.

Kuroda and Deputy Governor Hiroshi Nakaso said last month that it is too early to consider raising rates because inflation remains far from the BOJ’s 2 percent target, underscoring a determination not to repeat the mistake of prematurely tightening seen in 2000 and 2006.

Some BOJ officials are considering whether to give the market further guidance on interest rates once inflation begins picking up, according to people familiar with matter.

“It’s way too early for the BOJ to consider any move,” said Daisuke Karakama, chief market economist at Mizuho Bank Ltd. “They must be hoping this favorable conditions to continue but I don’t think the road to the price target will be all that smooth.”

However, it is notable that there are some risks that The BoJ point out that The Fed seems happy to ignore (as Bloomberg's Colin Simpson notes):

The BOJ doesn't seem to be buying the global reflation story. Perhaps they can see a scenario where the base effect of higher oil prices washes through and the yen starts to creep higher again. Either way, they seem subdued.

Timely warning from the BOJ statement following the Fed's rate hike: "Risks to the outlook include the following: developments in the U.S. economy and the impact of its monetary policy on global markets."

But, the growing populist sentiment that is sweeping Mexico and forcing Pena Nieto’s ratings to all-time lows, is the same sentiment that has vaulted Andres Manuel Lopez Obrador to the top of the list of likely presidential candidates to be elected in 2018. Staying true to his reputation, Lopez Obrador spent the better part of today blasting the Trump administration in a series of interviews.

In fact, speaking at the Washington Press Club earlier, Lopez Obrador said that the poor distribution of income and bad tax policies, not immigrants, were the cause of America’s economic distress. Per The Hill:

“President Trump’s approach of blaming migrants for the problems of the United States has been excessive. We will not allow that, you can’t implement a campaign of hate against Mexicans because that is neofascism,” he said.

Lopez Obrador was in town to present a complaint against Trump’s executive orders on immigration at the Interamerican Commission on Human Rights (IACHR).

“We are denouncing that Secretary [of Homeland Security John] Kelly’s executive measures affect not only Mexicans, but migrants from all over the world,” said Netzaí Sandoval, the lawyer who wrote the claim.

Meanwhile, Lopez Obrador vowed to take a more “firm” approach in re-negotiating the NAFTA free trade agreement with the Trump administration saying that while Nafta “didn’t hurt” Mexico’s economy “it is also not our salvation.” That said, he went on to warn that any cooperation between the U.S. and Mexico would be short lived if the Trump administration didn’t change it’s rhetoric on migrants.

Lopez Obrador said that once in power, he would change the nature of the bilateral relationship “without disrespecting anyone, but with firmness.”

He said it is “very probable” that he will win the upcoming election, scheduled for July 2018.

“We will convince the government of the United States and Trump that the best thing is a good deal, an understanding based on cooperation for development,” he said.

But Lopez Obrador warned the overlap between his administration and Trump’s would be short-lived if the Trump administration did not change its tune on migrants.

As we pointed out earlier this morning, Peter Navarro, Trump’s top trade advisor, seemingly took a slightly less combative stance on NAFTA and was quoted by Bloomberg as saying he wants the US, Canada and Mexico to form a trade “powerhouse”, supposedly one which is quite different from the existing “NAFTA” trade arrangement.

The Trump administration is re-examining a critical component of the free trade pact: the rules of origin, which dictate what percentage of a product must be manufactured in the U.S. for it to carry a Made in America label, Navarro said.

“We have a tremendous opportunity, with Mexico in particular, to use higher rules of origin to develop a mutually beneficial regional powerhouse where workers and manufacturers on both sides of the border will benefit enormously,” said Navarro. “It’s just as much in their interests as it is in our interests to increase the rules of origin.”

For example, under the current agreement, 62.5 percent of the total value of cars sold in North America must originate in the U.S., Canada or Mexico to avoid import tariffs. The U.S. wants to raise that threshold, making it harder for parts from other countries to enter the supply chain.

Since the comment appeared less combative than some more aggressive trade-related statements out of the administration, the market took them in stride and sent both the Canadian Loonie and the Mexican Peso to session highs.

Finally, here’s is Bloomberg’s interview with the so-called ‘Trump of Mexico’.